London Daily

Focus on the big picture.
Friday, Jul 03, 2026

Small businesses teetering on the brink as energy prices soar, Federation of Small Businesses warns

Small businesses teetering on the brink as energy prices soar, Federation of Small Businesses warns

Nearly 15% of small- and medium-sized firms polled fear they may have to close or downsize as a direct result of the spiralling energy bills, the Federation of Small Businesses says.

Spiralling energy costs are driving cafes, restaurants and independent shops all around the country to the edge of survival, according to an industry body.

The Federation of Small Businesses director Martin McTague told The Independent that soaring bills, combined with reduced consumer spending as shoppers grapple with their own household bills, is forcing thousands of small firms to make "impossible choices".

"How is an independent cafe supposed to find another £20,000 a year to keep the lights on and the coffee machine going, when they are barely breaking even as it is?" Mr McTague said.

Or how can a "small manufacturer find another £70,000 to keep the production line going and the staff room heated?" he asked.

"With five-figure annual energy cost increases common, too many small firms are being faced with impossible choices."

Almost 15% of small- and medium-sized firms expect they could be compelled to close or downsize as a direct result of the spiralling energy bills, according to a poll by the FSB.

The warning coincides with another bleak forecast that energy bills for the average household could climb a further £4,000 a year in the next eight months.

Auxilione, an independent energy consultancy, today predicted the price cap could reach £3,576 in October, rising to £4,799 in January, and finally hitting £6,089 in April.

About 45 million people are forecast to be thrown into energy poverty this winter as prices on the European gas market continue to soar.

Labour and energy industry voices have asked the government to freeze bills or top up the existing £400 bill rebate relief scheme, which could allow consumers to relax their purse strings.

But ministers have said nothing can happen until the prime minister takes office on 5 September.

"We need direct and immediate support from the government," Mr McTague told the newspaper.

"Extending energy support issued via the council tax system to the rates system, direct help with bills for those small firms which don't pay business rates, and cutting VAT on energy consumption will make a real difference in this space."

Newsletter

Related Articles

0:00
0:00
Close
Luxury bags take over the World Cup: style, status symbol, or just showing off?
National Productivity Institute Highlights Weak Business Investment Outside Southern England
UK High Court Orders Reassessment of Environmental Impact in Major Highway Project
UK Cyber Security Centre Warns of Rising Threat From State-Sponsored Digital Espionage
UK Education Secretary Launches National Reform of Apprenticeships and Vocational Training
Financial Conduct Authority Tightens Climate Risk Disclosure Requirements for Listed Firms
Rail Union Suspends Planned Strike Action to Enter Formal Negotiations With Operators
Northern Ireland Businesses Seek Clarity Over Post-Brexit Trade Rules
Welsh Government Launches Regional Growth Plan Targeting Transport and Digital Infrastructure
North Sea Wind Sector Attracts £5 Billion Investment Amid Expansion of Offshore Capacity
Scotland and UK Governments Establish New Framework for Coordinated Investment in Energy and Infrastructure
UK Government Launches Major Immigration and Border Policy Overhaul Review
Bank of England Signals Interest Rates to Remain Elevated Despite Easing Inflation Pressures
National Health Service Warns of Severe Winter Capacity Strain Across Hospital Trusts
Chancellor Orders Urgent Treasury Review Amid Concerns Over Structural Public Finance Gap
Prime Minister Unveils Sweeping Legislative Programme Focused on Housing, Health Service Reform and State Energy Plan
UK Parliamentary Committee Launches Inquiry Into Falling Primary School Rolls and Public Service Impact
UK House of Lords Debates Electoral Commission Powers and Political Finance Reform
UK Parliament Considers Expanding Carbon Rules to International Aviation and Shipping Emissions
UK Traffic Commissioner Revokes Hampshire Haulage Operator Licence Over Regulatory Failures
UK Parliament Examines Risks in Public Contracts Awarded to Technology Firm Palantir
UK Competition Watchdog Moves Toward More Flexible Merger Rules to Support Efficiency and Growth
UK Government Seeks Approval for £1.15 Trillion Public Spending Plan Amid Scrutiny Over Department Budgets
UK Parliament Debates Sweeping National Security and Steel Industry Nationalisation Bills
UK Government Issues Formal Apology for Historic Forced Adoption Practices and Announces £4 Million Support Scheme
UK DEFENCE AND TECHNOLOGY STRATEGY TILTS TOWARD SOVEREIGN CAPABILITY AND INDUSTRIAL INVESTMENT
UK ECONOMIC POLICY OUTLOOK SHAPED BY LEADERSHIP TRANSITION AND FISCAL SIGNALS
STERLING STRENGTHENS AMID SHIFTING MONETARY OUTLOOK AND GLOBAL LABOUR MARKET SIGNALS
UK HPV VACCINATION PROGRAM NEARLY ELIMINATES CERVICAL CANCER DEATH RISK IN YOUNG WOMEN
UK EXPANDS PRISON SAFETY REVIEW AS GOVERNMENT SEEKS WIDER SYSTEM REFORM
UK DRIVES DIGITAL ASSETS STRATEGY WITH NEW STABLECOIN REGULATORY MODEL
UK TO EXPAND AI INFRASTRUCTURE THROUGH NEW EUROPEAN TECHNOLOGY PARTNERSHIP
UK LAUNCHES £15 BILLION DEFENCE TECH SHIFT TOWARD ADVANCED MILITARY SYSTEMS
CIVIL SERVICE FACES SHIFT IN POWER STRUCTURE AS REGIONAL GOVERNANCE PLANS EXPAND
WHITEHALL CONSIDERS MAJOR DECENTRALISATION PLAN WITH SECOND GOVERNMENT HUB IN MANCHESTER
UK TARGETS SERVICES EXPORT GROWTH IN TRADE TALKS WITH CHINA AMID GEOPOLITICAL TENSIONS
POLICE WATCHDOG PROBES OFFICERS OVER HANDCUFFING OF DYING TEENAGER IN HAMPSHIRE CASE
UK REGULATORS UNVEIL DUAL OVERSIGHT FRAMEWORK FOR STABLECOINS AND DIGITAL ASSETS
KEIR STARMER ANNOUNCES £15 BILLION DEFENCE TECHNOLOGY BOOST IN FINAL MAJOR POLICY MOVE
ANDY BURNHAM SIGNALS STRICT FISCAL RULES AS LABOUR LEADERSHIP RACE SHAPES MARKET OUTLOOK
POUND STERLING HITS ONE-YEAR HIGH AS BANK OF ENGLAND SIGNALS NO IMMINENT RATE CUTS
UK Government Confirms Rejected Asylum Seekers to Remain Amid Enforcement Challenges
UK-China Economic Talks Focus on Services Trade and High-Value Sectors
Buckingham Palace Revamp Plans Unveiled to Modernise Royal and Public Facilities
Two Dead After Light Aircraft Crash in Essex Field, Investigation Underway
Princess Diana Marked at 65 With UK Tributes Reflecting on Her Public Legacy
England Teachers Face New Pay Cap Rules for Academy School Leaders Under Education Reform
Dublin Security Alert Escalates After Stabbing and Reports of Transport Disruption
UK Government Faces Scrutiny Over £10,000 Asylum Living Cost Contribution Requirement
England Prepares World Cup Knockout Match Against Democratic Republic of Congo
×